Ideal Living Company has 8.5 percent bonds outstanding that are paid semi-annually and has the YTM of 10 percent. The bonds pay interest on December 1 and June 1. Assume a 30/360 basis. What are the clean price and accrued interest if today's date is April 1, 2022? The bonds will be matured on December 1, 2030. Face value of the bond is $1,000.

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Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.